Article excerpt

Questions and answers about what investors should do as risk
factors -- in Europe and elsewhere -- are likely to come back on the
horizon in financial markets.

The coming months could be challenging for investors, as economic
and market turmoil present risks to be managed. Chew Soon Gek, head
of strategy and economic research for the Asia-Pacific region at the
Credit Suisse Private Banking office in Singapore, spoke recently
about how people with high net worth should be adjusting their
holdings.

Q. Going into September, risk factors -- in Europe and
elsewhere -- are likely to come back on the horizon. What should
investors do?

A.We're still advising clients to overweight equities because of
expectations of cuts in interest rates by the European Central Bank,
among others. We believe that markets are headed for a short-term
consolidation at current levels, and we retain a constructive
strategic view on equities as an asset class over six to 12 months.
We have reduced our positions in high-yield and emerging market debt
from overweight to neutral on account of the strong performance this
year, and now await confirmation of an improved economic outlook in
the U.S. and clarification on the implementation of E.C.B. measures,
particularly its bond purchases of peripheral European countries.

We have moved from underweight government bonds back to neutral,
but over all remain underweight in fixed income as an asset class.
And we have also moved from overweight to neutral on commodities, as
global economic momentum has not turned positive yet.

Q. Do you think Asian investors fully appreciate the
seriousness of the European debt crisis?

A.Clearly, Asian investors see and appreciate the risks to their
portfolios, and many of the businesses they manage are impacted by
changes in demand in the developed world, as well as currency
volatility. Most client questions relate to likely outcomes for the
euro zone debt crisis, the timing of key political and central bank
meetings, and the adequacy of the bailout funds.

That said, many countries in Asia, particularly in Asean [the
Association of Southeast Asian Nations, which includes Brunei,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
Singapore, Thailand and Vietnam], have experienced strong domestic
demand growth this year, and that has kept these economies and some
of their stock markets well supported, in contrast to the situation
in peripheral Europe. …